Posts tagged ‘estates’

According to reports, aside from what appear to be a couple of generous bequests (what is Possum Inc.?), David Bowie, or should I say David Robert Jones, has left most of his real estate and 50% of the residue of his estate to his wife Iman. 25% of the residue will go to each of his two children (one real estate property goes to David and Iman’s daughter). I suggest litigation should be unlikely with this division but …

Life insurance can be an effective way to leave a legacy. It allows you to benefit a loved one and, unless the insured’s estate is the beneficiary, avoids the requirement that funds pass through probate. However, life insurance proceeds are not entirely free and clear of estate obligations in Ontario – so beware before spending that money (and do not disregard notice of court proceedings) – as one man’s daughter learned in the recent case of Bormans v. Bormans Estate.

Sections 72(1) (f) and (f.1) of the Ontario Succession Law Reform Act deem life insurance proceeds to be an estate asset for the purpose of determining the rights of a dependant to support from the estate. Insurance proceeds therefore may be available to pay support if the other assets of the estate are insufficient to do so. In Bormans, Mr. and Mrs. Bormans divorced after 38 years of marriage. Mr. Bormans was to pay support to Mrs. Bormans and warranted to her that she was named as beneficiary of his company life insurance policy. When he died, without assets, Mr. Bormans was in arrears of his support obligations. To Mrs. Bormans’ surprise, the company policy had been cancelled but Mr. Bormans had purchased another life insurance policy, naming his daughter as beneficiary. The proceeds of that policy had been paid to the daughter. The daughter, despite notice of a court application by Mrs. Bormans for dependant’s relief, proceeded to dispose of most of the insurance proceeds.

The Court found that Mrs. Bormans was a dependant of Mr. Bormans’ estate. As a result, the Judge determined that most of the policy proceeds paid to the daughter should have been available to satisfy the estate’s support obligations to Mrs. Bormans. The Court placed emphasis on the fact that Mr. Bormans had warranted that Mrs. Bormans was the beneficiary of a life insurance policy. The daughter was ordered to pay to Mrs. Bormans most of the insurance proceeds, with the exception of some amounts spent prior to her receiving notice of the court application. As the daughter had already used a large part of these proceeds, she became personally liable to repay these amounts.

I often focus in this blog on interesting cases dealing with points of law in estates and elder law. However, I read an interesting article in this week’s Lawyers Weekly by Marilyn Piccini Roy dealing with the important role of mediation and the mediator in elder law. Definitely worth a look.

Please note: The original hyperlink used in this post was not functional. I believe that the problem has been corrected. My apologies.

In a February 2013 post, I commented on a Manitoba Court of Appeal case where defendants to an action for a declaration of paternity sought an order requiring the plaintiff and a third party to submit to DNA testing (see DNA Testing in Estate Matters – How Far Can it Go?). The Court in that case held that an order requiring a party to litigation to submit to DNA testing could be made but such an order could not be extended to a non-party. Obviously, without both parties involved, testing would be of no value.

With that evidentiary determination in hand, the plaintiff recently brought a motion for summary judgment for a declaration of paternity (Nandwani v. Nandwani). The plaintiff relied heavily on the presumption of paternity legislated under section 23 of the Manitoba Family Maintenance Act which states that; “unless the contrary is proved on the balance of probabilities … a man shall be presumed to be the father of the child in one or more of the following circumstances: (a) he was married to the mother at the time of the child’s birth …”. That section creates an onus on the defendants to proffer evidence to displace the presumption of paternity. The mother and alleged father were married at the time of the plaintiff’s birth.

In denying the motion for summary judgment, the Master declined to follow a line of caselaw that held that the presumption of paternity is so strong that it would require overwhelming evidence to rebut it. His reasons for doing so had to do, in part, with changes in public policy and advances in scientific testing.

In dismissing the motion for summary judgment, the Court commented positively on the lower court decision on the motion to compel DNA testing, finding that the purpose for the presumption of paternity originally served to overcome certain legal barriers resulting from, for example, findings of illegitimacy. Such concerns do not exist today as the concept of illegitimacy is no longer valid or recognized at law. Therefore, the presumption of paternity may no longer be so strong as older caselaw suggests. As well, even though the Court of Appeal had dismissed the motion for DNA testing, the Master’s reasons, reading between the lines, suggest that the Court was not prepared to allow the plaintiff to obtain summary judgment in circumstances where he was successful in precluding the gathering of evidence that, in all likelihood, would have answered the question of paternity one way or the other.

At common law, an action in negligence or for an intentional wrong is not permitted against or on behalf of a deceased person. The right to sue arises from statute, in Ontario the Trustee Act(s. 38). As a result, compliance with the Act is a must. The Act includes its own limitation period for actions, providing that an action under section 38 “shall not be brought after the expiration of two years from the death of the deceased”. Unlike the Limitations Act, 2002, there is no “discoverability” factor to be considered. The date is fixed.

However, like most rules, there is an exception. This limitation period can be extended or “tolled” under the equitable doctrine of “fraudulent concealment”. In other words, where a party has actively concealed wrongdoing, he or she cannot rely on the statutory limitation period to frustrate an action. In order to show fraudulent concealment though, the party asserting concealment must show:

(a) the parties are in a special relationship with one another;

(b) given be nature of this relationship, the conduct complained of amounts to an “unconscionable thing” for one to do to the other;

(c) the person conceals the right of the other (either actively, or as a result of the manner in which the act that gave rise to the right of action is performed)

This doctrine was recently considered in by the Ontario Superior Court of Justice in Rajmohan v. Solomon Family Trust. At issue was whether victims of a mortgage fraud could sue the estate of their lawyer more than two years after his death. The lawyer was not a party to the fraud but did not discover it. The Court found that the requisite special relationship existed and that there had been concealment because the facts surrounding he lawyer’s actions only became evident after a review of his file. However, while the Court was very critical of the manner by which the lawyer handled the transaction, such actions were at best negligent and did not amount to an “unconscionable thing”. As a result the doctrine could not be applied to toll the limitation period and the action was dismissed.

The Supreme Court of Canada today released a decision that resets the bar for how courts will deal with summary judgment motions in Ontario and, by effect, the other common law jurisdictions of Canada. In Hryniak v. Mauldin, The Supreme Court conducted a review of the history of the Ontario rules for summary judgment, the various changes and the interpretation of those changes by lower courts. While there will be much comment on the effect of the decisions, it certainly appears at first blush that the Court is intent on opening up the availability of summary judgment. Highlights of the decision include the following:

Undue process and protracted trials, with unnecessary expense and delay, can prevent the fair and just resolution of disputes;

A shift in culture is required. The proportionality principle can act as a touchstone for access to civil justice;

Summary judgment motions provide an opportunity to simplify pre-trial procedures and move the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case;

Summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims;

The new powers in Rules 20.04(2.1) and (2.2) expand the number of cases in which there will be no genuine issue requiring a trial by permitting motion judges to weigh evidence, evaluate credibility and draw reasonable inferences;

Summary judgment motions must be granted whenever there is no genuine issue requiring a trial;

There will be no genuine issue requiring a trial where the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result;

There will be no genuine issue requiring a trial if the summary judgment process provides a judge with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure;

If there appears to be a genuine issue requiring a trial, the judge should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2);

Absent an error of law, the exercise of powers under the new summary judgment rule attracts deference. The exercise of the fact‑finding powers under Rule 20.04(2.1) and a determination whether there is a genuine issue requiring a trial, are questions of mixed fact and law which should not be overturned, absent palpable and overriding error.

While estate planning gets most of the ink, Canadian statistics remind us that divorce is increasingly affecting seniors. It should not come as a surprise, as people live longer and boomers enter their senior years.